Megaupload has filed papers in US District Court to dismiss the federal government's massive online piracy case against the file-sharing website and its founder, Kim Dotcom.

"Megaupload believes that the US didn't follow the rules," Megaupload and Dotcom lawyer Ira Rothken told AFP, stressing that the company was based in Hong Kong.

"The rules in this instance didn't allow a foreign corporation to be served and indicted as it has not have a presence in the US. We believe the law is clear in that issue, and we're asking the court to dismiss the case."

Megaupload's lawyers filed a motion on Wednesday urging the court to dismiss the charges against the company and executives.

The US indictment alleges Megaupload and related file-sharing sites netted more than $175 million and cost copyright owners more than $500 million by offering pirated copies of movies, TV shows and other content. US authorities allege Dotcom earned $42 million from his file-sharing websites in 2010 alone.

"The court should dismiss the indictment against Megaupload to prevent any further injustice," the company's filing said.

"Megaupload now finds itself in a state of abeyance, with no end in sight."

It also called for authorities to unfreeze the website's assets so that the company can pay the 30 lawyers who have assured its defense for free from New Zealand to the United States, as well as in Hong Kong, Canada and Europe.

A hearing to examine the request is due to be held June 29 at the US District Court for the Eastern District of Virginia in the city of Alexandria. The judge's ruling could impact an August extradition hearing in Auckland.

"There's no justification to keep Megaupload's assets frozen, and we believe that the court is going to make a reasonable amount of assets available to pay defense costs," Rothken said.

US authorities have seized $50 million in Megaupload assets.

Dotcom and his co-defendants, who were arrested when New Zealand police raided the Internet tycoon's sprawling Auckland mansion on January 20, deny any wrongdoing and have vowed to fight the charges.

They are on bail as they await a court bid in August to extradite them to the United States.

Dotcom, who legally changed his name from Kim Schmitz, has denied any wrongdoing and vowed to fight extradition, labeling the case against him "misleading and malicious."